The documents that accompany the audited financial statements, such as the board's report, and what the auditor does with them.
To consider whether there is a material inconsistency between the other information and the financial statements or the auditor's knowledge obtained in the audit, and to respond and report appropriately.
SA 720 sits in the Reporting phase of the audit. The Standards on Auditing are issued by the ICAI Auditing and Assurance Standards Board (AASB) and deemed to be prescribed by the Central Government under Section 143(10) of the Companies Act 2013. Compliance with SAs is mandatory for every audit conducted by a Chartered Accountant in India.
For authoritative text, refer to the ICAI AASB Compendium of Standards on Auditing at icai.org.
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SA 720 — The Auditor's Responsibilities Relating to Other Information — is a Standard on Auditing issued by the ICAI Auditing and Assurance Standards Board. The documents that accompany the audited financial statements, such as the board's report, and what the auditor does with them. To consider whether there is a material inconsistency between the other information and the financial statements or the auditor's knowledge obtained in the audit, and to respond and report appropriately.
Yes. Standards on Auditing are deemed to be prescribed under Section 143(10) of the Companies Act 2013, and ICAI members must comply with them in every audit of historical financial information. Non-compliance must be justified and can attract professional consequences in peer review, NFRA inspection, and disciplinary proceedings.
Documentation sufficient for an experienced auditor with no previous connection to the audit to understand what was done and why (SA 230). For SA 720 in the reporting phase, that means evidencing: Determine, through discussion with management, which documents make up the other information and obtain them in time; Read the other information and consider whether there is a material inconsistency with the financial statements or with the auditor's knowledge; If a material misstatement of the other information appears to exist, discuss it with management and respond appropriately.
